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Kansas Star Casino exceeding revenue expectations

After another strong month of gaming revenue production, the Kansas Star Casino in Mulvane continues to easily exceed first-year revenue projections by state consultants.

In 2010, when the state was considering casino proposals for Sumner County, Cummings Associates of Arlington, Mass., predicted the casino would generate $159.1 million in gambling revenue in its temporary casino in 2012. Wells Gaming Research, of Reno, Nev., pegged the number at $132.6 million.

Entering September, the Kansas Star had generated $129.5 million since it opened in mid-December 2011. It has been averaging more than $15 million a month in 2012, on pace to exceed $180 million this year.

The Kansas Star generated $15.7 million in gaming revenue in August, up about $600,000 from July, according to the latest numbers posted Wednesday by the Kansas Lottery, which owns and operates the casino’s games.

“Clearly the Kansas Star has exceeded the expectations of the state of Kansas. We really couldn’t be happier,” said Keith Kocher, gaming facilities director for the lottery. “We expect with the expansion they will continue that performance. They really have hit a home run so far.”

“We are delivering, in fact over-delivering, on our commitment to Kansas,” Scott Cooper, Kansas Star general manager, said in a written statement. “Our investment in Kansas Star’s temporary casino has performed well. It’s generated revenues beyond expectations to the advantage of residents and businesses in the region.”

The revenue numbers are expected to rise when the Kansas Star’s permanent casino opens early next year with more slot machines, gaming tables, and food amenities. Cummings forecast a rise in gaming revenue to $192.1 million in 2014, and $213.4 million in 2016. Wells forecast $178.7 million in 2014 and $209.5 million in 2016.

They also said a proposed tribal casino in Park City would hurt the Kansas Star. Cummings predicted an adverse impact of 20 to 33 percent. But efforts by the Wyandotte Nation of Oklahoma to get its Park City land approved for gambling by the federal government are pending in the U.S. Interior Department, where an application has languished for years, and in Kansas federal court.

Cooper said carpet is being laid in several areas of the permanent Kansas Star Casino building and paint is going up on the walls. Detail finish work is underway in a new buffet and steak house. The permanent casino could open before the January 2013 deadline, perhaps before the end of the year, he said. An attached Hampton Inn and Suites is set to open with 150 rooms in mid-October, ahead of schedule.

The permanent casino floor will have 1,829 slot machines, 45 gaming tables, and 10 poker tables. It has been operating with 1,411 slots, 32 tables and a five-table poker room in its temporary facility.

The conversion of the current casino to its intended use as an arena for equestrian events, concerts and trade shows will begin as soon as the permanent casino opens, Cooper said. Work is on schedule for the Kansas Star to begin hosting equestrian and other events beginning in the summer of 2013, he said.

As part of its mandate to share gambling revenue with the state and local governments, the casino has given $28.5 million to Kansas through August, and $1.3 million each to the city of Mulvane and Sumner and Sedgwick counties.

As a result, Mulvane adopted a 2013 budget that lowers the mill levy for city residents by 10 percent, and lowered electric rates by 5 percent.

Sumner County included a 27 percent reduction in property tax rates in its 2013 budget.

Bidding for a new EMS facility on the casino site opens on Thursday, and the Mulvane City Council will review the proposals at its next meeting on Sept.17, said Kent Hixson, city administrator. Construction should start in mid- to late October, and the facility should open in the spring, weather permitting, Hixson said. The new facility primarily will serve as an ambulance station, he said.

Hixson said the culture of downtown Mulvane, which he calls “East Mulvane,” hasn’t changed as a result of the casino, which sits on annexed property about five miles to the west.

“Most people in East Mulvane, unless they go to the casino, don’t know it’s there,” he said.

Mulvane Police Chief Dave Williams, whose department has jurisdiction at the casino site, said his officers have dealt with drunk and disorderly visitors and arrested trespassers who tried to get into the casino after enrolling in the state’s self-exclusion program. But he said the activity has been nothing they didn’t expect.

“We really haven’t had any surprises,” Williams said. “It’s probably a little less of an increase (in crime) than I’d anticipated. Things might pick up a little when the larger casino is done and the hotel is in operation.”

Sumner County Sheriff Darren Chambers said that through July his department had received 44 calls for assistance from the area around the casino since January. Some are to assist Mulvane police, some are from neighbors reporting burglaries and complaining of traffic issues such as speeding, he said.

A few have reported items being stolen from their mailboxes, probably for identity theft, he said.

He’s also had to send his deputies to pick up pedestrians who leave the casino after an argument with a spouse and start walking back to Wichita.

Kansas Highway Patrol Capt. Joe Bott, head of Troop G, which patrols the Kansas Turnpike 24 hours a day, said troopers have seen an in increase in traffic, DUI arrests and accidents in the 9-mile stretch of the turnpike between the south Wichita exit and the casino interchange. He couldn’t link the DUIs specifically to the Kansas Star.

“We can’t say it’s all exclusively from casino, but we have to conclude that plays a part,” he said.

Bott said he researched other casinos built along highways, and he anticipated a rise in DUI arrests.

“It’s pretty typical of what we thought, maybe a little less,” he said.

Las Vegas-based Boyd Gaming Corp. announced in May that it would purchase Peninsula Gaming, the Dubuque, Iowa, company that is building and managing the Kansas Star, for $1.45 billion.

Pending all necessary regulatory approvals, and based on progress to date, Boyd anticipates the acquisition will close sometime in the fourth quarter, Rob Meyne, vice president of corporate communications for Boyd, said in an e-mail to the Eagle.

The company will need approval from the Kansas Lottery to assume Peninsula’s management contract, and it must pass background checks and be licensed by the Kansas Racing and Gaming Commission.

Kocher said Boyd and state officials are in discussions about the approval process, but he wouldn’t elaborate.

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